Some of the Adams Produce fleet sit outside of the Finley Avenue distribution center. Adams Produce, one of Birmingham's largest private firms, has new owners. (The Birmingham News/ Tamika Moore)

BIRMINGHAM, Alabama -- A fraud lawsuit against Bir­mingham accountants Frost Cummings Tidwell Group by shareholders of bankrupt Adams Produce has been moved to U.S. Bankruptcy Court in Birmingham from Jefferson County Circuit Court, according to legal filings.

An affiliate of a Texas hedge fund that was the majority share­holder of Adams Produce filed documents in the case last week, saying the proper forum for suing Frost Cummings is bankruptcy court.

API Holdings sued Birming­ham- based Frost Cummings last month, saying the accounting firm was negligent in auditing the books of Adams Produce. That, the suit says, made the company seem healthier that it was, induc­ing the investment firm to buy a majority stake from the founding family and others in 2010 for $20 million.

Adams Produce filed for bank­ruptcy protection in April, citing $19.5 million in assets and $41.6 million in debt to hundreds of creditors, including truckers, lenders and produce suppliers. The company was formed in 1903, originally operating from Morris Avenue, before moving to Finley Avenue, near the Jefferson County Truck Growers Associa­tion farmer's market.

The company is under a Department of Justice investigation, according to court document filed after the bankruptcy, and its failure is the subject of lawsuits involving shareholder API, an affiliate of Dallas hedge fund CIC Partners, Adams family members and former Chief Executive Scott Grinstead.

API said assets and income were overstated on the Adams Produce books, liabilities were glossed over, and $1 million in bogus amounts due from customers were fabricated. None of the subterfuge, API said, was detected in the Adams Produce audit by Frost Cummings that led up to the $20 million buyout.

API, the suit says, "lost its entire investment in Adams Produce Co., which would not have happened for Frost's misrepresentations and professional negligence."

Frost Cummings declined to comment on the matter, citing the pending nature of the litigation. The suit asks for unspecified compensatory and punitive damages.